OAKLAND — Internet radio company Pandora said Wednesday that it will implement a broad restructuring that includes cutting jobs and that it plans to expand its operations in Atlanta and away from its Oakland headquarters.
In a filing with the Securities and Exchange Commission, Pandora said it would cut 5 percent of its workforce, which would amount to 125 jobs from its current base of about 2,500 employees.
Pandora said in a statement that the company will put more of its focus on ad-tech and audience development efforts, and it expects the moves to save $45 million annually.
The company also hinted at where its future may be headed by saying it will expand its presence and workforce in Atlanta, because the city provides Pandora with “a significant opportunity to add instrumental talent in a region with lower costs than the company’s headquarters in Oakland.”
“While we are committed to having Oakland remain our headquarters, we’re excited to build on the great foundation of our awesome team there and expand our presence in Atlanta over time,” Pandora Chief Executive Roger Lynch said in a statement.
Michael Pachter, who covers Pandora for Wedbush Securities, said the size of Pandora’s restructuring plans “isn’t that great, but it’s enough to get them to breakeven with a little revenue growth, and shows that they’re serious about returning to profitability.”
Pandora’s plans come after what has been an erratic two years for the company that pioneered the music-streaming industry online.
Last year, Pandora launched Pandora Premium, its first on-demand, subscription-based music-streaming service that didn’t include advertising of any sort. However, Pandora was late to the game with its $9.99 a month Premium service and lost ground to Spotify and Apple Music, which had similar services available long before Pandora Premium became available.
Also in 2017, Pandora co-founder and CEO Tim Westergren left the company not long after Pandora sold a 19 percent stake in itself to satellite-radio provider Sirius XM. Lynch, a former CEO at Sling, came on board as CEO in September of last year.
Pandora saw an uptick in subscribers when, in November, it reported 5.19 million total subscribers during its third quarter, 29 percent higher than the same period in 2016. The company also said it surpassed 1 million Pandora Premium subscribers.
In December, Pandora suggested its would put more emphasis on its ad-based services, and launched an option that allows listeners to watch a video ad and then listen to music on demand without having to pay for a subscription.
Wall Street reacted positively to Pandora’s announcement Wednesday as the company’s shares rose 3.4 percent, to $4.94 cents in after-hours trading. Pandora’s stock price is down by 62 percent over the last year.
A Pandora spokesperson said the company had no further comment on the restructuring, but would give more details when it reports quarterly results Feb. 21.
